With asset managers highly competitive and active in ESG approaches, UBS reports on its performance in 2018, breaking 10 per cent for total core assets held in sustainable investments.

In updates from across its business, UBS has reported “significant progress” in meeting sustainable investing (SI), philanthropy, and business sustainability targets for 2018.  

"We have set ourselves the goal to create long-term positive value for clients, employees, investors and society. Our goal carries with it a clear responsibility for taking a leading role driving change towards a positive future," Axel Weber, the Swiss group's chairman, said in a statement last week.

Banks and wealth managers are increasingly trumpeting their work in helping clients put money to work in ways that fit with environmental, social and governance goals. ESG investing has become a hot topic in the sector over recent years, fuelled by concerns about the environment and also seen as a focus for younger people. 

On that agenda, the bank reported total SI assets of $1.11 trillion and core SI assets of $313 billion, which make up 35.8 per cent and 10.1 per cent respectively of the bank’s total invested assets at the end of 2018. For the year, the bank reported that core SI assets involving ESG integration and a range of sustainability strategies increased by 72 per cent, up from $182 billion in 2017. This was mainly driven by integrating ESG factors across the group’s investment research and a significant portion of assets managed. It highlighted moves to tighten standards on coal finance, including a project-level ban on financing any new coal-fired power plants globally.

The bank reported $1.9 billion of client asset flowed into SDG related impact investments in 2018, with the goal of reaching $5 billion in commitments by the end of 2021. It also said it has retained its leadership in the Dow Jones Sustainability Indices (DJSI), a widely recognised ESG ratings tool, and been upgraded to AA by the MSCI ESG index, another key performance benchmark, putting it in the top three among its peer group.  

UBS said transitions to a low-carbon economy were on track, reporting a significant drop in carbon-related assets from $6.6 billion in 2017 to  $ 2.7 billion in 2018, while climate-related sustainable investments had increased from $74 billion to $87.5 billion for the period.

"It's our priority to protect our clients' assets and UBS from the materialisation of risks. This includes climate-related risks, since sustainable financing is high on our agenda. We already limited our risk appetite for carbon-related assets and have further tightened our standards on coal-financing transactions while growing our exposure in climate-related sustainable asset classes," Christian Bluhm, group chief risk officer, said.

In delivering foundation goals in 2018 through the UBS Optimus Foundation, the group said programmes had “helped improve the wellbeing of 2.8 million children globally, up from 2.1 million in 2017," supported through development impact bonds in education and healthcare.

Overall, and in line with an internal climate strategy UBS established in 2006, the group aims to source 100 per cent of its electricity from renewable sources by next year. It also said it is progressing towards achieving the goal of 40 per cent of employees volunteering by the end of 2020, with 40 per cent of those skills based.